Page 15 - Banking Finance December 2024

ROUNDUP

(except multistate co-operative banks); these fake firms, the accused would the due payment of GST to the central
or insurance companies. However, use stolen personal identities, and and state governments.
firms doing only branch audits are not multiple bank accounts to undertake
covered for thus exercise. the fake GST transactions without any Job quality, not quantity
The level of the firm obtained using real supply of goods or payment of tax
to the government. matters, says Nageswaran
AQMM v 1.0 was being reviewed by a
India's job creation in India is progress-
peer reviewer and recorded on the This is not the first instance of such a
ing, but the spotlight should be on the
website of ICAI against the validity of multi-crore fraud under the indirect
the firms' peer review certificate. tax regime. Over seven years after the quality of those jobs, particularly as
rollout of GST in July 2017, authorities artificial intelligence (AI) is changing
There is no change regarding the ap- labour dynamics," said Venkatramanan
plicability of AQMM v 2.0. Therefore, are still grappling with multiple such Anantha Nageswaran, Chief Economic
AQMM v 2.0 is also mandatory for firms instances of GST frauds, involving Advisor speaking at Singapore FinTech
auditing the version 1 covered entities, broadly similar modus operandi. Typi- Festival.
cally, such cases involve fake identities
ICAI said.
or mule accounts to undertake fraudu- "There is no issue with job creation it-
India is the only country where a sepa- lent GST transactions in a bid to avail self," Nageswaran said referring to the
rate model for self-evaluation of audit input tax credit or fake bills without evidence from sources like the Employ-
quality maturity has been introduced. actual supply of goods. ees' Provident Fund Organization and
There are about 96,000 audit firms in private job indices.
Many suppliers also undervalue their
the country. A significant majority of
these are proprietorships. final goods and show purchase of raw "I don't think job creation itself is an
materials at lower rates. Or, they sup- issue. What we're focused on is the
A series of fraud events in Corporate ply taxable goods and services without quality of jobs being created," he said.
India such as Nirav Modi scam in
Punjab National Bank, the blowout of
IL&FS, collapse of DHFL had shocked GST records 2nd-highest collection at Rs. 1.87 lakh
the nation and raised concerns over crore in October driven by festive sales
audit quality and the ability of statu-
Gross Goods and Services Tax (GST) collections rose 8.9 per cent year-on-year
tory auditors to highlight corporate
misconduct when they attest financial to Rs 1.87 lakh crore in October (for sales in September), the second highest
statements. level of monthly collections seen since the July 2017 rollout of the indirect tax
regime, primarily driven by a rise in domestic revenue than imports, the data
released by the Finance Ministry showed. On a net basis, GST collections in-
GST frauds multiply: Offi- creased 7.9 per cent to Rs 1.68 lakh crore, the data showed.
cials grapple with wide- The pickup in gross GST collections came after the pace of growth had

spread evasion, complex dropped to over a three-year low level in September and despite a high
rate of 42.8 per cent for domestic refunds. While the gross GST collections'
scams growth rate picked up pace, it still continues to be less than the double-
An auto rickshaw driver in Pune and a digit growth seen during the previous two financial years. The highest-ever
fake company registered in his name gross GST collection was seen in April 2024 at Rs 2.10 lakh crore.
were at the heart of an elaborate The rise in GST collections in October was mainly driven by an increase in
Goods and Services Tax (GST) scam
domestic transactions, while the contribution from imports slowed. Gross
unearthed by the Directorate General
domestic revenue of GST increased by 10.6 per cent in October as against
of GST Intelligence (DGGI) authorities
5.9 per cent in September, while gross imports GST revenue rose by 3.9 per
last week involving an amount of Rs cent in October, slower than 8 per cent in September.
5,000-Rs 8,000 crore. The accused in
the fraud are alleged to have regis- On a net basis, domestic GST revenue grew by 8.7 per cent in October as
tered as many as 246 fake GST firms against 4.5 per cent in September, while revenue from imports increased
to commit the multi-crore fraud. Using 5.4 per cent in October as against 1.7 per cent in the previous month.

14 | 2024 | DECEMBER | BANKING FINANCE